After facing repeated protests over his resistance to raising taxes on wealthy New Yorkers, Gov. Andrew M. Cuomo relented on Tuesday, striking a deal with legislators that will boost state revenues by $1.9 billion while simultaneously dropping the middle class tax rate to the lowest it has been in 58 years.
Members of “Occupy Wall Street” have for months been pressuring elected officials to raise taxes on wealthy Americans and lighten the burden on the poor and middle class. This very issue is what activist and author Naomi Wolf was arrested over in October, outside a Huffington Post event where Cuomo was being honored for his support of marriage equality.
At the time, he was opposed to renewing or replacing the state’s “millionaire’s tax,” which expires at the end of the year. But instead of doubling back on the “millionaire’s tax,” Cuomo’s deal will create a series of new tax brackets, according to The New York Times.
New York citizens earning $20,000 per year or more are currently taxed at a rate of 6.85 percent, as are married couples earning more than $40,000 per year. The new tax brackets would drop tax rates for the lowest incomes to 6.45 percent, while increasing the rates for higher earners. Couples with incomes between $150,000 and $300,000 will pay 6.65 percent; households that earn $300,000 to $2 million will pay 6.85 percent; and incomes over $2 million will be taxed at 8.82 percent, the Times noted.
The change represents the lowest middle class tax rate New Yorkers have seen in 58 years, Cuomo said in a prepared statement.
The arrangement represents a significant turn for the governor, who had adamantly opposed raising taxes on his wealthiest constituents. His position on the issue flew in the face of fellow Democrats and allied labor unions, which pressured the governor to fill the gap left in state revenue when the “millionaire’s tax” expires.
It also flew in the face of public opinion: not only do most New York voters support keeping the tax, a huge majority of Americans and even a majority of Republicans support higher taxes for top earners.
The state is expected to face a budget deficit of at least $2.4 billion this fiscal year, although the Times estimated that it could grow to $3.5 billion.
Photo: Flickr user bogieharmond.